The AUD/USD Pair: A Comprehensive Analysis
Recent Market Movements
- AUD/USD added to Friday’s uptick and revisited the 0.6500 region.
- The Trump-led rally in the US Dollar continued to struggle.
- The RBA will publish its Minutes of its November 5 meeting on Tuesday.
At the start of the week, the US Dollar (USD) saw a corrective phase, with the US Dollar Index (DXY) retracting from recent highs and dropping below the 107.00 mark. Meanwhile, the Australian Dollar (AUD) saw gains, surpassing the 0.6500 level and aiming for the crucial 200-day SMA near 0.6630 in the short term.
Movements in the Aussie Dollar were influenced by factors such as a rebound in copper and iron ore prices, signaling relief from recent declines. Additionally, investors showed a more optimistic view on China’s economic stimulus efforts.
RBA’s Recent Decision and Economic Outlook
During its November 5 meeting, the Reserve Bank of Australia (RBA) maintained interest rates at 4.35%, in line with expectations. The central bank acknowledged progress towards its inflation target but remained cautious about economic growth. While the current rate setting is deemed appropriate, there are speculations of a potential rate cut by May 2025.
RBA Governor Michele Bullock emphasized the need to keep monetary policy firm until a consistent decline in inflation is observed.
Although Australia’s inflation figures showed signs of cooling, ongoing inflation risks, especially under a potential Trump administration, could uphold the strength of the US Dollar, limiting AUD’s upward momentum. Concerns about China’s economic outlook also pose a downside risk for the AUD.
Upcoming Economic Data and RBA’s Minutes
Australia’s recent labour market report showed a stable Unemployment Rate of 4.1% in October, with a modest rise in employment. This indicates a resilient labour market in Australia.
Later in the week, investors will focus on the RBA’s release of the Minutes from its November 5 meeting.
Technical Outlook for AUD/USD
In the immediate term, support levels for AUD/USD stand at 0.6440 and 0.6347, while resistance levels are at 0.6628 and 0.6687. The four-hour chart indicates consolidation within the recent range, with potential support and resistance levels at 0.6440, 0.6347, 0.6546, and 0.6563.
Overall, the AUD/USD pair faces a mix of domestic and global factors influencing its movements, making it crucial to monitor economic data releases and central bank decisions in the coming days.